Destination USA: How Obama’s New Tourism Order Will Boost Jobs

January 27, 2012

The media didn’t take notice. President Obama didn’t mention it in his State of the Union. Nor did he emphasize it on his post-address swing-state tour stop in Nevada. But the outlook for job creation in some of the country’s hardest hit metropolitan areas turned sunnier earlier this month when President Obama issued an executive order that contained several shrewd and long-overdue measures to promote travel and tourism in the United States.

As it happens, we called for exactly such sensible and pragmatic federal reforms to aid and abet economic recovery in states and metros in the recent economic development agenda we devised for Nevada--a state particularly reliant on travel and tourism.

Broadly, Obama’s order calls for his administration to develop a national strategy on travel and competitiveness and to expedite the processing of visas for foreign visitors (without compromising national security, of course).

Tourism is already the country’s number one service export industry. These initiatives promise to give the industry a further boost by making it even easier for foreigners--especially newly-affluent and travel-hungry Brazilians, Indians, and Chinese--to come and spend their money in the United States.

The executive order acts on discrete recommendations from the president’s own Jobs Council, calling for action plans from the State Department and Homeland Security to expand and make permanent the Global Entry Program that allows frequent (and highly-screened) travelers easier passage through immigration. Additional goals include:

Reviewing the list of countries eligible for the visa waiver program

Expanding visa processing capacity this year by 40 percent in China and Brazil, where the wait is notoriously long, and capping the time that the majority of applicants must wait for an interview to three weeks; and

Piloting new programs to simplify and expedite processing for visa renewals and other low-risk applicants

But the effort is long overdue. Industry estimates suggest that overly-onerous visa regulations implemented in the wake of 9/11, compounded by federal neglect of a national tourism strategy, have deterred some 11 million potential visitors each year. Foreign visitors to the United States actually fell by 2 million from 2000 to 2009 even as global wealth boomed and global spending on travel increased 87.2 percent, reports McKinsey. The president’s own job task force notes that the United States lost 30 percent of its share in the global tourism trade from 2000 to 2010.

Regaining market share by facilitating travel to the U.S. is a low-cost high-impact job creation strategy for the near term. “Exporting” tourism supports jobs at home--much needed jobs for the lesser-skilled in the service industries of places like Orlando and Las Vegas, where the leisure and hospitality industry employs upwards of 20 and 32 percent of workforce, respectively, or over 260,000 workers in each place.

In the wake of a recession that hit consumption industries disproportionately, such commonsense measures to boost near-term consumption of U.S. goods and services by newly-affluent foreigners represents the sort of low-cost pragmatic policy prescriptions the economy needs right now.

But there’s more. The conventional wisdom is that tourism is job-rich but low-value. In reality, a strategically leveraged tourism industry is replete with opportunities for higher value diversification: just witness Las Vegas, whose hospitality complex manages hotels and casinos across the globe; Napa Valley, which has carved itself an up-market niche for wine aficionados; and Ogden, Utah, where the amenities of the Wasatch Front launched a world-beating outdoor recreation manufacturing industry.